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OECD test is not a "skills" test, it is a knowledge test, and it is subjective to opinions.
This is one of the questions
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Question level 5 - NEW OFFER
Mrs Jones has a loan of 8000 zeds with FirstZed Finance. The annual interest rate on the loan is 15%. Her repayments each month are 150 zeds.
After one year Mrs Jones still owes 7400 zeds.
Another finance company called Zedbest will give Mrs Jones a loan of 10 000 zeds with an annual interest rate of 13%. Her repayments each month would also be 150 zeds.
Question
If she takes the Zedbest loan, Mrs Jones will immediately pay off her existing loan. What are two other financial benefits for Mrs Jones if she takes the Zedbest loan?
The 2 answers are
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FINANCIAL LITERACY QUESTION (LEVEL 5) THE CORRECT ANSWER IS
She will be paying a lower interest rate AND
She will have more money available
Those are clearly opinions
No, they're both actually correct facts.
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the interest to be paid on the first loan in total is 5,303.65
the interest paid on the second is 7,841.09
You dont actually have more money, you have more debt to be paid.
The correct answers reference the interest RATE and the amount of money AVAILABLE to Mrs. Jones (to use for whatever purpose) after acquiring the bigger loan. Reading comprehension matters.
And as anyone knows, one doesn't have to pay all that interest. Merely prepay the loan, or refinance with a lower rate loan. OK, well not anyone... you made the assumption that would never happen even though the very question itself specifically talks about refinancing an existing loan.
No. They'll probably do just as good if not better running this country. It ain't like we've done such a great job that puts us in a position to judge our progeny.
The correct answers reference the interest RATE and the amount of money AVAILABLE to Mrs. Jones (to use for whatever purpose) after acquiring the bigger loan. Reading comprehension matters.
And as anyone knows, one doesn't have to pay all that interest. Merely prepay the loan, or refinance with a lower rate loan. OK, well not anyone... you made the assumption that would never happen even though the very question itself specifically talks about refinancing an existing loan.
No, the question specifically mentions that she is using one loan to pay off the other and ask what is the benefit of taking out a new loan.
To believe there is a benefit, you have to assume that going into more debt is a good thing. You have to come to the same conclusion as them about it being good before you can even begin to think of an answer . There are very few people in this forum believe that, there are very few people in this world that believe that since only 3 nations in the entire study got above 20% on that answer, most in the single digits, and im actually surprised that you are one of the people in the world who agree with that, what happened to fiscal responsibility.
Anyways, as I said, she doesnt have more money, she has more debt to be paid back. She went from owning $3,705.95 in interest to owing 6,780.91 She almost doubled her debt.
But you think that is a financial benefit just because you lowered your interest rate(but pay more money in the long run) and have someone else's money.
My millenials feel it's a great thinning of the herd thing now that they're in the workforce. They work hard, have already been promoted several times and are making great money. Meanwhile, some of their peers are complaining that what's being asked of them is beneath them, they're not being respected, and the work is boring. And of course, they have idiot parents at home saying things like, "you don't have to put up with that."
You don't have to put up with that. They can go start their own businesses. Boomers laid a path of destruction in the economy, so the opportunities have never been brighter.
No, the question specifically mentions that she is using one loan to pay off the other and ask what is the benefit of taking out a new loan.
Yes, that's refinancing at a LOWER rate, which is one of the correct answers.
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To believe there is a benefit, you have to assume that going into more debt is a good thing. You have to come to the same conclusion as them about it being good before you can even begin to think of an answer.
Incorrect. As the question clearly shows, the assumption is that the loan can be prepaid at any time, erasing the debt.
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Anyways, as I said, she doesnt have more money, she has more debt to be paid back.
Your reading comprehension is flawed or absent. The correct answer was that she had more money AVAILABLE (to use for whatever purpose).
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But you think that is a financial benefit just because you lowered your interest rate(but pay more money in the long run) and have someone else's money.
Again, for the financially illiterate... borrowing more money doesn't necessarily mean one will pay more in interest. It all depends on future factors which include prepaying the loan, refinancing at a lower rate, etc.
That's why the correct answers specifically focus on the new loan's lower interest rate and the fact that the borrower has more money available to use after the refinance.
I do worry that so many young are against freedom of speech and other freedoms which over time leads to Fascism. As always, you reap what you sow. Of course, we can always hope their kids are freedom loving and demand freedoms....by that time, not a concern for me.
It was the boomers who screwed this country and expect the millennials & Gen Xers to pay for it.
Actually it was a minority of Boomers and majority of millenials that supported policies contributing to the huge debt we have...thanks Nancy, Harry, & Barack for most of the US debt in just 8 years.
Would you support a balanced budget amendment for the Feds? I would.
I do worry that so many young are against freedom of speech and other freedoms which over time leads to Fascism. As always, you reap what you sow. Of course, we can always hope their kids are freedom loving and demand freedoms....by that time, not a concern for me.
It's usually, if not entirely liberals. Look at the liberal dominated colleges and universities! They demand counseling if someone writes Trump 2016 and they do what ever they can to shut down any ideas that run counter to their liberal dogma.
It's liberals who are actively shutting down Trump rallies, blocking entrances and actively preventing others from exercising their first amendment rights because THEY don't approve of the candidate.
I'm not a Trump supporter or even a conservative but what is happening in this country with liberals and their hatred and active supression of freedom of speech or assembly is disgusting... and this is the thing that DOES lead to fascism over time.
The scary part is that the Republican party seems to be imploding, Trump is causing the party to split. I don't think he can win the general election and if he does, I think the blowback against republicans will be huge. So we could be left with one dominant political party. Democrats. Precisely the people who are so against freedom of speech.
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